Thursday, May 21, 2009

Facebook's foreign clones

Andy Greenberg, Forbes.com

June 18, 2008

Since Facebook opened to the general public in 2006, anyone can become a part of Mark Zuckerberg's booming social network. But if users aren't satisfied to merely create a Facebook profile, Agriya Infoway, based in Chennai, India, offers another option: Create your own Facebook.

Agriya sells what it calls "Kootali," a $400 software package that lets developers replicate Facebook's design and features, complete with friend networks, photos and "mini-feeds"--even Facebook's font. Fifty copies of the software have been purchased in the last six months, says Agriya's chief technology officer, Aravind Kumar, though he says many hundreds more have been distributed on peer-to-peer file-sharing networks.

Kumar isn't concerned about the legal implications of piggybacking on the Palo Alto, Calif.-based social network's success. "We haven't stolen any of Facebook's content or images, so we haven't done anything wrong," Kumar says. "We're just giving Facebook's look and feel to our customers."

Those customers, mostly unknown sites like Faceclub.com and Umicity.com, don't pose much of a competitive threat to Facebook. But, according to Forrester Research analyst Jeremiah Owyang, Agriya's cloning software represents a more general problem for Facebook: that any skilled developer can recreate the site's basic social networking functions. "Social networking features are a commodity," Owyang says.

In other words, Facebook's advantage is not in its proprietary software but in its massive user base. And in countries where Facebook has yet to penetrate the mainstream Web audience, that low competitive barrier may mean the site is no more likely than its copycats to attract users.

Some international sites that closely mimic Facebook's design and features are already enjoying Facebook-like success. Creators of the German look-a-like site StudiVerzeichnis--German for "Student Index"--have gathered around 6 million registered users. VKontakte, a Russian university-based networking site whose name translates to "In Contact," boasts that it's not only the most popular social networking site in the country, but with 4.5 million unique visitors a day and 13.3 million registered users, the most popular site in Russia.

The Chinese site Xiaonei, whose name means "In the School" in Mandarin, claims to have received around 15 million unique visitors in April. The site's parent company, Oak Pacific Interactive, received $430 million the same month in venture capital funding targeted at Xiaonei from the Japanese investment firm Softbank.

The copycats' explosive growth comes at a time when Facebook seems to be exploring its own international offshoots. Since January, the social network has invited volunteers to translate its pages into languages ranging from Italian to Mandarin and has launched Spanish, French and German options. Li Ka-Shing, one of Facebook's biggest investors, recently upped his stake in the company by more than $40 million, saying he saw synergies between Facebook and the telecom business of his conglomerate Hutchison Whampoa (other-otc: HUWHY.PK - news - people )--a company that runs mobile networks in Asia, the Middle East and Africa.

But Facebook's clones may have already saturated some international markets. In China, for instance, where the Web audience numbers more than 220 million users by the count of research firm BDA China, Xiaonei has already registered more than 90% of college students, according to Oak Pacific Interactive's chief operating officer, James Liu. He compares Facebook to Google (nasdaq: GOOG - news - people ), eBay (nasdaq: EBAY - news - people ) and MySpace, all of which have tried to penetrate China's Web market and been trounced by local competitors.

"We've seen what happens to these multinational corporations that try to enter to China," he says. "Every one has failed miserably. We don't expect any exception in the case of Facebook."

Taking legal action against international doppelgangers isn't likely to help, says Gregory Rutchik, head of the Arts and Technology Law Group. Web design, he says, is a form of expression where even minor tweaks may be enough to avoid copyright infringement. Litigating country by country, he adds, would be a long, expensive and uncertain process.

Facebook may have another reason to avoid copyright lawsuits, points out John Dozier, an Internet-focused intellectual property lawyer. Flinging copyright complaints, he suggests, might work against Facebook if it finds itself on the receiving end of a copyright suit--a likely possibility on a site where users can post any content they choose.

As for Facebook's mimics, they emphasize small differences they say set them apart. VKontakte's founder, Pavel Durov, argues that his site's shade of blue is slightly different from Facebook's, and that it offers better location-based searching. Xiaonei's James Liu points out that Xiaonei has fewer barriers separating networks of friends, and offered instant messaging even before Facebook added the feature in April.

But Wang Xing, who created Xiaonei in 2005, admits that the site's design was originally "borrowed" from Facebook. In fact, he's borrowed it twice: After selling Xiaonei to Oak Pacific Interactive in 2006 for an undisclosed sum, Wang essentially cloned his Facebook clone.

Hainei, Wang's second social networking project launched near the end of 2007, is aimed at adults rather than students, but its design is practically identical to Xiaonei's--and Facebook's. In six months, it's attracted more than 100,000 registered users, Wang says.

Asked if he feels any compunction about taking features wholesale from Facebook--twice--Wang points to Mark Zuckerberg's own copycat problems. Since 2004, the owners of rival site ConnectU have claimed that Zuckerberg stole intellectual property from their social network while working as a software developer for the site.

"ConnectU accuses Facebook of stealing their idea. Does that matter?" Wang asks. "No. We don't worry about that. It's not about the idea. It's about execution."